The equal pay bomb that could wipe out public sector jobs

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I have just decided that my work is of equal value to that of the feminist supermodel Cameron Russell. Neither of us, admittedly, is quite as useful as a plumber, and I can’t claim to be of much use promoting swimwear. But otherwise I reckon we are a pretty close match. We both tart ourselves around and while my work doesn’t involve a lot of physical input, I would like to think that it requires a slightly higher contribution from the brain department.

There then arises the question: should I not be paid as much as she is? Ludicrous? Perhaps, but no more so, I think, than what is going on in Birmingham, where council taxpayers are facing a £1 billion bill for a mass equal pay claim on the part of 11,000 female staff. Not even the proposed sale of the National Exhibition Centre will fill the hole: it has been valued at only £300,000. The city council is facing the wholesale closure of art galleries, museums and leisure centres, as well as the curtailment of social care services and children’s services. The bill is about twice what Birmingham spends running its schools in a year.

The winners, until they want to send their children to school or need a meal on wheels, are the 11,000 staff who are in line for a windfall. One dinner lady is rumoured to have been told to expect £190,000 in backdated pay, with interest. Had these women been paid less than men whom they were working alongside, you could see it as a case of discrimination. But there is no evidence that dinner ladies were paid less than dinner men, if such people exist. Rather they were employed in jobs which, retrospectively, an employment tribunal has ruled to be of ‘equal value’ to male-dominated occupations. The Equality and Human Rights Commission has helpfully provided a list of male-dominated and female-dominated occupations which are now, thanks to employment tribunal cases, deemed to command equal pay. Being a school nursery nurse is, apparently, of equal value to being a local government architectural technician. Being a canteen worker is of equal value to being a surface mineworker, or a plumber.

Except, presumably, when you have a broken boiler. That is the problem with deeming completely different occupations to be of equal value: it is entirely subjective. But then that is what makes it so useful to the no-win, no-fee lawyers who have hit the jackpot in bringing these cases. The vaguer the law, the more work there is for lawyers.

The concept of work of equal value is a bomb which has been planted beneath the public finances. It destroys the labour market. It is now impossible for Birmingham City Council, or any public sector employer, to respond to a shortage of architectural technicians by upping their pay without also giving nursery nurses a pay rise.

And of course there is a ratchet effect. Logically, when ordered to pay office cleaners the same as dustmen, Birmingham City Council could have solved the problem by cutting dustmen’s pay. The council did in fact try this, but of course the dustmen went on strike and so the end result of the equal pay ruling was an overall rise in the wage bill.

When I first heard of equal value claims, I imagined that they must have been placed on the statute book in an underhand move by Harriet Harman. Sure enough, the last Labour government did have a role: Blair sparked off the claims with ‘single status agreements’ with public sector unions in 1999, which placed a duty on public sector bodies to introduce pay scales that matched female-dominated occupations with male ones. But here is a surprise: the underlying legislation, which introduced the concept of work of equal value into discrimination claims, turns out to be the Equal Pay (Amendment) Regulations 1983, passed in the heyday of supposed free-market Thatcherism.

The coalition has not lifted a finger to defuse the bomb of equal value pay claims. There really is no party which advocates a functioning labour market in the public sector. It is an area of public policy which has been surrendered unconditionally to feminism and the public sector unions.

The unions no doubt feel pleased with themselves, but ultimately equal value pay claims will undermine the public sector. They will render the employment of public servants so expensive that virtually every activity will have to be contracted out to the private sector to save taxpayers a ruinous bill from equal value pay claims. If you will excuse the gender-specific occupational reference, what the axeman is about to lop from Birmingham’s budget he will soon be lopping from the public sector nationwide.

Ross Clark compiles our weekly ‘Barometer’. His books include How to Label a Goat.